IRS Challenges and Captive Insurance with Van Carlson

·57 min·5 clips

Scott Howell argues insurance is the only reason the US doesn't look like a third-world country after catastrophic events.

The episode begins with host Scott Howell making a passionate case that insurance is the only reason the United States isn't a third-world country after catastrophic events. He introduces data from 'Insights' magazine showing the percentage of a nation's GDP dedicated to property and casualty insurance correlates directly with prosperity, with the US leading at 9.3%. Guest Van Carlson is introduced as the founder and CEO of SRA831B Admin with over 25 years in risk management. Carlson agrees insurance creates commerce but expresses serious concern about the current insurance market's instability with rising rates and exclusions. The conversation shifts to how tax codes, like 1031 exchanges, also drive wealth creation by incentivizing risk-taking. Carlson explains his company's focus on the 831B tax code, introduced in the 1986 Tax Reform Act originally for crop insurance. He details how it allows business owners to form a small insurance company (a C-corp) to which they pay premiums, taking a deduction at their operating company while the funds grow tax-deferred to cover retained risks. These risks include gaps in traditional coverage, like brand protection, intellectual property, or high deductibles. Carlson states his company manages over 800 such privately owned insurance companies. He reveals his company underwent a costly IRS promoter audit starting in August 2022, which was shut down in June 2024 with no resolution. They also spent years and significant money seeking a private letter ruling from the IRS, which was ultimately denied. In response, SRA831B Admin, along with a Texas business owner, has sued the IRS. Carlson criticizes new IRS regulations as scare tactics and argues the code is legitimate but was misused by some for estate planning. He connects the need for such tools to the difficult current insurance market where business owners struggle with affordability and coverage. The hosts ask about ideal client profiles, and Carlson mentions revenue, risk class, and business owner attitude, with medical practices and contractors being common clients. The episode concludes with a discussion on how independent agents can partner with SRA and a final motivational sign-off from the hosts.

As heard by us

A conversational look at cash-flow risk and the 831B tax code, framed through crop insurance history.

Van's conversation with The Insurance Guys Podcast focuses on a practical insurance gap: a business may cover its physical property while leaving cash flow exposed, especially when business interruption coverage depends on a direct triggering event.

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Why you'd press play

You want to follow the moment cash-flow risk turns an insurance conversation toward the 831B tax code.

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